Odaily News: Markets have increased their bets on a Federal Reserve rate hike at next week's meeting. The first key inflation report released this week showed that U.S. producer prices rose 5.4% in the 12 months through August. Before the report was released, the market expected about a 65% probability that the Fed would raise rates by 25 basis points at its September 15-16 meeting. According to the price of federal funds futures contracts on the Chicago Mercantile Exchange (CME), the market now expects that probability to have risen to about 70%.

Odaily reports that data shows the U.S. August PPI annual rate came in at 2.4%, higher than the market expectation of 5.3%, while the August core PPI monthly rate came in at 0.2%, below the market expectation of 0.3%, sending mixed signals as Fed officials debate whether to raise rates next week.

Following the PPI data release, the market has fully priced in a Fed rate hike in October. This PPI report was published one day before the latest CPI data is released, which is expected to show relatively mild so-called core inflation.

Some Fed officials have hinted that the rate decision at the September 15-16 meeting may depend on what this week's reports reveal. Fed Chair Warsh said in a speech last month that if policymakers cannot be confident that underlying inflation trends are improving significantly, the Fed "still has work to do." Amid ongoing hostilities between the U.S. and Iran, a renewed rise in oil prices could further complicate the outlook.

Odaily: After the release of US PPI data, US short-term interest rate futures edged lower, and markets raised their bets on a Federal Reserve rate hike.

Odaily News: US August PPI YoY came in at 5.4%, versus an expected 5.3%; the previous reading was revised from 4.70% to 4.8%.

US August PPI MoM came in at 0.4%, versus an expected 0.40%; the previous reading was revised from 0.00% to 0.1%. (Jinshi)